You can convert regular 1.44 Mb disks to 720 kb by placing a piece of
tape over the "other" hole at the top of the diskette, i.e., the one
which does not have the write-protect slide in it.  This hole is used
to detect whether the disk is 720 kb or 1.44 Mb.  If you cover the hole,
the drive thinks that the disk is now a 720 kb disk.  A piece of PVC
electrical tape does the trick nicely.

Now you need to format the disk.  Windows XP will not let you format
720 kb disks from the GUI, but you can do it from the DOS prompt.
Use the Start->Run menu item and type "cmd" and click 'OK'.  This
will bring up the so-called "DOS" window of Windows XP.  Then type
FORMAT A: /T:80 /N:9 and away you go !!

I tried this today on my machine running Windows XP Service Pack 2
and I was able to produce a correctly formatted 720 kb diskette.

Hope this helps.
Stephen Brickles